The historical dynamic for software markets was one of ‘winner take all/most.’ Economies of scale, network effects, soft monopolies/bundling, patent moats: there are many reasons why. Putting your money into one of these leading companies could produce incredible returns over time for venture, institutional, and retail investors. In some twisted way then, the opposite of these companies (Oracle, Google, Meta, Microsoft, Apple, Salesforce for example) would be ‘winner take none’ outcomes. Verticals where an incredible amount of investor capital was committed and even the ‘best/surviving’ companies ended up consuming a tremendous amount of dollars.

Sometimes a winner take none market can emerge when a technology breakthrough just didn’t pan out, or there’s a dramatic change in customer needs/expectations. But other times, and through the most recent cycle, it seems like some of the most dramatic ones were just blitzscaling aimed the wrong target. Narratives and spreadsheets which somehow would take low margin, high fixed cost businesses and transform them into technology companies.

Self-storage on Demand. Winner take none.

Micromobility Scooters. Winner take none.

Coworking. Winner take none.

As a venture investor these are especially painful because they fail slow, burning a lot of capital and time and hope along the way. Early in Homebrew’s existence we had a mini Winner Take None in the consumer/SMB shipping space, so I’ve got some familiarity with these situations and don’t mean to just throw stones at others.

What drove these mistakes? Besides ZIRP, there’s often the application of a business model from one success to a market that’s not as well suited. The “Uber for X” and “Airbnb for X” largely lacked positive attributes that transportation and travel possessed and accordingly found infrequent usage, low margins, complex processes and so forth. Winner take none.

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